Feds to LePage: We can’t offer a better deal on Medicaid expansion

AUGUSTA, Maine — The federal government has notified the state that it cannot negotiate a better deal on Medicaid expansion under the Affordable Care Act.

Republican Gov. Paul LePage interpreted the latest news, delivered in a May 24 letter, as supporting his position that the federal government is pushing millions of dollars of cost onto Maine taxpayers and failing to give Maine the same provisions other states are receiving through the Medicaid program. Legislative Democrats and others said Thursday morning that the letter affirms the argument they’ve been making for weeks: that Maine would be financially irresponsible not to take the deal that’s already on the table.

The May 24 letter to DHHS Commissioner Mary Mayhew from Cindy Mann, director of the U.S. Centers for Medicare and Medicaid Services, came as the Legislature’s Health and Human Services Committee voted 10-4 on Thursday to send another Medicaid expansion bill to the full Legislature. That vote followed a veto by LePage last week of LD 1546, a bill that linked Medicaid expansion to repayment of the state’s remaining Medicaid debt to hospitals. The committee’s bill is a proposal to have Maine expand Medicaid eligibility separately from repaying the debt to hospitals.

Mann stated in her letter that the federal matching rate in the Affordable Care Act would pay for 100 percent of the state’s Medicaid expansion in calendar years 2014, 2015 and 2016 and decrease to 90 percent by 2020. Mann said that over the 10-year period beginning in 2014, the average matching rate for covering childless adults under the expansion equates to about 94 percent. The federal government currently pays 62.57 percent of coverage costs for about 10,500 adults without children in Maine and likely would increase that funding to 100 percent under the Medicaid expansion, according to the Centers for Medicare and Medicaid Services. Maine also would receive 100 percent funding to cover about 50,000 additional childless adults under Medicaid expansion.

“These rates are set by law, and CMS has no authority to change the matching rates by regulation or waiver,” wrote Mann. “The unprecedented matching rates for newly eligible individuals ensures that Maine can continue to cover low-income adults with significant savings over the 10-year period.”

House Speaker Mark Eves, D-North Berwick, said in a prepared statement Thursday morning that Mann’s letter “is further confirmation that Maine should take the deal.”

“We have a definitive offer,” said Eves. “There is no excuse to delay accepting these federal health care dollars to cover the cost of health care to tens of thousands of Maine people.”

LePage had a decidedly different opinion on what the letter means.

“I’m disappointed that the federal government will penalize Maine for our previous generosity,” LePage said in a prepared statement. “Maine will not get full funding for able-bodied parents, while other states receive 100 percent. It’s also disappointing that the feds won’t work with us to provide the additional years of funding I requested. Once again, the federal government has failed to come through for Maine. Despite our generosity in expanding welfare over the last decade, we are being offered less than what other states are getting.”

According to LePage’s office, Maine will not be credited for previous expansions of Medicaid that made nondisabled parents eligible for health care coverage.

“That means Maine will get only 62 percent federal funding for nondisabled parents,” reads a statement from LePage. “Most states are eligible to receive 100 percent federal funding for these parents.”

Maine already provides Medicaid to parents at the level prescribed in the federal health care law, 133 percent of the poverty level. Maine would continue to receive its standard matching rate, which is 62.57 percent, for those parents under the health care law. In Maine, the expansion wouldn’t make any new parents eligible for coverage, but it would prevent about 15,000 parents from losing coverage on Jan. 1, 2014, because of a state law enacted last year.

Mann wrote that the Centers for Medicare and Medicaid Services has reached a “tentative conclusion” that the adults without children covered under a previous Medicaid expansion in Maine would be considered newly eligible because the coverage Maine offered them did not meet the criteria established in the Affordable Care Act. Specifically, Mann said Maine did not provide coverage for hearing care.

“If you can confirm that Maine did not provide hearing services and that the relevant benchmark plans in Maine did provide such services, we can immediately provide you with confirmation that the childless adults would receive the newly eligible match rate described in this letter,” wrote Mann.

Sara Gagne Holmes, executive director of Maine Equal Justice Partners, said LePage and his administration were misrepresenting the facts.

“His statement that the federal government is breaking its promise to Maine in regards to this, I don’t see how he gets there,” said Holmes, who added that the Centers for Medicare and Medicaid Services’ letter is “pretty clear” that if the Department of Health and Human Services submits a letter stating that Maine doesn’t offer audiology services and benchmark plans to childless adults, the state would receive the 100 percent funding for three years.

“Maine has not done that,” said Holmes. “You have to question why the department has not provided that information. What becomes clear is that there is no need to put off a decision about whether or not Maine accepts federal funds. There’s nothing left to negotiate.”

House Republican Leader Kenneth Fredette of Newport said the letter is proof that the federal government won’t fully fund the expansion.

“This comes as no surprise, and confirms the fact that Maine taxpayers would be on the hook for the current welfare expansion proposal just as they were for past expansions,” said Fredette. “Past MaineCare expansions led to cost overruns, shattered enrollment projections and the crowding out of education funding without any improvement to rates of charity care, the number of uninsured Mainers or physical health outcomes. Medicaid expansion is not the only option.”

Senate Republican Leader Michael Thibodeau of Winterport had a similar reaction.

“I am not surprised that the federal government has declined to fully fund this massive welfare expansion, despite the fact that Maine has already expanded Medicaid well beyond what most states have done,” said Thibodeau in a prepared statement. “I also believe this validates Republicans’ decision to uphold the governor’s veto on Medicaid expansion. We now have further proof that we have no idea how much it is going to cost the state of Maine.”

LePage said his support of expanding Medicaid depends on the federal government agreeing to cover certain needs of the elderly and disabled, particularly more than 3,000 people who are on waiting lists for home- and community-based services.

“We need to focus on fixing the problems we have today,” said LePage. “Then we can have a discussion about how to responsibly extend coverage options to additional populations.”